The largest banks are getting ready to introduce a new crypto currency

08/31/2017

Some of the world's largest banks - Barclays, Credit Suisse, Canadian Imperial Bank of Commerce, HSBC, MUFG and State Street - have stepped up efforts to launch a new crypto currency. The technology of the distributed registry will be used to conduct instant settlements and clearing of transactions with securities, writes Financial Times.

Namecoin via flickr

In August last year, Swiss bank UBS together with Clearmatics Technologies created a new crypto currency, which was called utility settlement coin (USC). UBS has already been adopted by Deutsche Bank, Santander and BNY Mellon, as well as ICAP broker.

At that time, UBS planned to present ways of applying crypto currency to regulators and central banks for a year in order to get their approval and in early 2018 to start commercial use of it "in a limited number of low-risk operations" in order to increase efficiency and accelerate their final stages.

Now the project participants are trying to deepen the USC discussion with central banks and are working on additional measures to protect the new crypto currency.

"We are in discussions with central banks and regulators, and we will continue them in the next 12 months with a view to a limited launch near the end of 2018," said head of strategic investment and innovation in financial technologies at UBS Hyder Jaffrey.

The blockchain technology initially deterred banks, seeming unreliable. However, having thoroughly studed issue, financial companies are finding new ways to use the blockchain to accelerate calculations for a variety of transactions.

Introduction of USC assumes that parties of transactions with securities will not wait until the transfer of traditional funds happens. Instead, they will use the crypto currency, which can be exchanged for the usual money in central banks. This approach will reduce time and money costs, as well as the use of human resources.

The single USC crypto currency will then be exchanged for a variety of traditional currencies, depending on the needs of the participants in the transaction.